Lawrence M Walsh is the president and CEO of The 2112 Group, a US-based channel consulting and research firm; editor-in-chief of the blog Channelnomics; and founder of the Cloud & Technology Transformation Alliance and Channel Vanguard Council.

Channel feeling 'impotent' as major launch nears

If you’re having a hard time getting excited about Windows 8, you’re not alone.

While Microsoft has steadily ramped up expectations and extolled the new operating system’s virtues for much of the last year, few of the software company’s traditional manufacturing partners and channel solution providers are seeing much opportunity resulting from Windows 8.

Windows 8 is probably the most important product launch for Microsoft since The Rolling Stones trumpeted the arrival of Windows 95 with the classic Start Me Up anthem.

Windows 8 will finally get Microsoft into the tablet market, giving it a place at the table with rivals Apple and Google. The launch of the new OS could stop the bleed of market share to the iPad and the plethora of Android tablets flooding the market. And it will, in theory, fuel an entire new class of Ultrabook computers.

Early reviews of Windows 8 are promising. Testers and analysts say the operating system is stable, functional and innovative. The new interface, formerly known as “Metro,” gives Windows the much-needed touch functionality that Apple and Google have had for several generations. And it’s ideally suited for mobile and lightweight devices.

In short, Windows 8 should propel a massive refresh of existing desktop and notebook computers, as well as drive a wave of tablet sales to businesses and power users who want native compatibility to legacy Windows applications and enterprise-class management and security capabilities.

There’s much to be excited about. Yet, not many in the channel are excited. In fact, the Microsoft ecosystem – component makers, PC manufacturers, distributors and resellers – is bracing for a lull rather than a surge in Windows-related sales.

Consider this: Intel, ARM, Seagate and Western Digital have all revised their fourth quarter sales forecast downwards as they continue to see PC sales slip.

Hewlett-Packard, Lenovo, Dell and the rest of the PC market saw sales slip nearly 9 per cent in the third quarter as demand shifted from notebooks and desktop computers to tablets and smartphones. And AMD is reportedly preparing to lay off between 10 and 30 percent of its workforce as it sees demand slide.

Windows 8 is actually having a dampening effect. Yes, a large part of the market is shifting toward mobile devices, and this accounts for some of the slacking sales in the Microsoft ecosystem. However, a large number of users – particularly businesses – are taking a wait-and-see approach.

The typical business adoption curve for a new Windows version is 18 months after release. Analyst firm Gartner historically recommends against businesses adopting a new version until after Service Pack 1 is released.

Given that most businesses have either just finished or are continuing to migrate from Windows XP to Windows 7 (with most skipping Vista altogether), it will be as long as two to three years before the business marketplace has a definitive need for Windows 8.

Microsoft hasn’t done itself many favours in the channel, either. While it’s been working with manufacturers to prepare a new generation of PCs and tablets for market, Redmond hasn’t been as forward thinking with its reseller partners. As recently as September, solution providers were telling Channelnomics that Microsoft wasn’t providing the same volume of material and enablement resources for Windows 8 as they had provided for Windows 7.

This could leave the channel relatively impotent when Windows 8 is released.

Have you got yours? Me neither

Not that Microsoft is actually making Windows 8 upgrades readily available for its reseller partners. The company is advocating for users to upgrade to Windows 8 by buying discount licences directly from its website. This is aggravating to nearly everyone in the Microsoft value chain – manufacturers, distributors and resellers – because it cuts them out of the initial sales wave and contributes to the dampened PC market.

Even if Microsoft and its partners were in perfect sync on Windows 8, many observers question whether the market is ready for a radical change in the familiar Windows franchise. The touch-based interface isn’t intuitive and may fail to dissuade tablet users from buying iPads and Android devices.

While Windows 8 does have a “classic” mode, it doesn’t offer enough advantages to compel an upgrade from Windows 7. In fact, most Windows users who’ve seen Windows 8 say they prefer the legacy version.

On top of all this, Microsoft is choosing to refresh much of its product portfolio concurrently with the Windows 8 release. New versions of Windows Server, Lync, Dynamics and Office will come to market around the same time – and this comes as Microsoft continues to press its cloud products to resellers, syndication partners and direct accounts. This wave of products and innovations may be more than enough to inundate and overwhelm the Microsoft channel, again dampening sales.

Now, let’s be fair: Microsoft is in a near-impossible situation. The market loves beating up on Microsoft’s shortcomings and short shifts Microsoft’s potential when it does something innovative. Microsoft needed to go radical with Windows 8, at the very least to propel its products to a new level of design and performance that the market demands. It’s just unfortunate that the market loves Microsoft to stay the way it’s always been (and then criticises it for not changing).

Will Windows 8 be a smashing success? It depends on your perspective. Solution providers are on board for the long haul. Microsoft, of course, will claim victory regardless of what happens.

After all, this is the same company that insisted Windows Vista was a great operating system to the bitter end. ®